31 December 2009

Top Bond Papers posts of 2009

If you haven’t had your fill of lists, here’s another one.  This time it’s some of the top posts from Bond Papers for 2009.

Now by top,  we are referring to ones that proved popular with readers, ones that led to much bigger stories, ones that broke some news and -  in the case of whistleblower and breast feeding  - posts that made concrete proposals on issues of significant public importance.   Now these 11 aren’t the only great posts from Bond papers for 2009.  There are plenty every month.  These just happen to be particular favourites.

Regular readers will notice some topics have been conspicuously absent from the series of year-end posts on top stories.  Not to fear, gentle and faithful readers.  There is another post to come.  That one will deal with the 10 biggest unreported or underreported stories of the past year.  Now they aren’t ones that have been ignored in this corner of the universe.  Rather they are ones that the conventional media in the province have consciously chosen to ignore – for reasons only those editors and reporters can possible try and rationalise – or ones where the conventional media have only reported on some aspects of a much bigger, juicier story.

Now just to give you a clue, one of the stories below is tied to a larger issue.  The Rhode Island memorandum story is just one aspect of a much larger  tale.

But more on that later.

For now, here are some of the best stories of the past year here at Ye Olde Scribbler’s Shoppe:
  1. Equalization flips, flops and fumbles (January).  This one was topping the traffic counter for weeks in the early part of 2009.  it basically documents the raft of different and often contradictory positions the provincial government has taken on Equalization since 2004.  It’s only when you actually sit down and list things off chronologically you can see the entire convoluted mess.
  2. BP’s draft whistleblower law (January).  The provincial Conservatives might not be able to deliver on their 2007 election promise, but your humble e-scribbler helped them out in January.  Here, in its entirety is a workable, draft law that would protect people who reveal dirty secrets in the public interest.
  3. Uncommon tourism potential (February).  Really one of a series of posts on the idiotic idea of stringing hydro power lines through Gros Morne park.
  4. Enhancing east coast search and rescue (March).  BP’s proposal on improving search and rescue capability offshore without resorting to the knee-jerk townie crap about putting helicopters in St. John’s.
  5. Wheeler deal numbers and stuff (April).  How quickly everyone forgot that the provincial government’s energy corporation  can wheel electricity anywhere it can find a market. The April deal was good news when it happened and it is still good news even if the official version tries to pretend the whole thing doesn’t exist. This post puts some hard numbers on the deal.
  6. Kremlinology (June).  The first post in what has become a running – and successful – series.  In June, your humble e-scribbler pointed out that something was off with Trevor Taylor.  By September, the old boy had thrown in the towel and left politics. Sometimes big stories grow out of the very smallest of clues.
  7. The Wookey Hole Witch (July)  Okay so this one is a bit different.  A post on a search for a new tourism actor in a small English town has turned out to be a popular hit for people searching the Internet.  The witch has replaced Janice Mackey Freyer as the queen of the regular search hits.
  8. Rumpole and the Summer of Discontent (August).  Problems in provincial court in Gander and four vacancies on the bench that still haven’t been filled.  
  9. RI contradicts Dunderdale (September)  Natural resources minister Kathy Dunderdale told the people of Newfoundland and Labrador a bit of a nose-puller about why a memorandum of understanding on Lower Churchill power went nowhere. Your humble e-scribbler got the straight story from Rhode Island.
  10. Unsound financial management (September)  Cabinet minister Paul Oram admits what your humble e-scribbler has been saying for four years:  provincial government spending is unsustainable.  finance minister Tom Marshall and others chime in to agree.
  11. 66 at 6 in 2 (October).  A simple idea:  improve public health by having 66% of new mother’s still breast feeding at the end of six months after delivery, and hit that goal within two years.

New Year’s Contest: name the new NL senator

So parliament will start anew in the New Year and all the empty seats in the senate will have new bums to fill them.

Who do you think will get the nod?

Who do you think should get the job, if it wasn’t a partisan wank-fest?

Drop a name in a comment space. See if you can beat some of the suggestions on a post from last October.


The Spin Economy

Spin is bullshit.

Plain and simple.

In this Canadian Press story, much is made of the fact that 29% of employers in a survey by careerbuilder.ca said they planned to hire next year.

Logically, that means that the overwhelming majority – 71% – planned to keep things just as they are or reduce staff.  And since the story says only nine percent of those surveyed planned to decrease their staff levels, that means that – you guessed it - twice as many of those surveyed weren’t planning to do anything with their staffing at all next year as indicated they’d be hiring.

So where in the name of merciful heavens did Canadian Press get the idea this means the survey is “adding optimism” that the year-long job doldrums are over?

They got it from the news release, of course written by a company which has a vested interest in hyping the crap out of expectations for a boost in hiring.

And Canadian Press isn’t alone.  Others have picked up the pure, undiluted bullshit from careerbuilder.ca and its American parent.  It’s all in line with the line coming from different sources for about a year now that the recession was over and the recovery was underway.  Unfortunately for the purveyors of all this nonsense, repeating the same crap over and over doesn’t actually do anything least of all make the untrue suddenly and miraculously true.

What’s really more interesting in all this is not that organizations with a vested interest in hyping the crap out of something – like government for example – actually hypes the crap out of something.  Nope.  Notice instead that even the venerated Canadian Press  is now being affected by the same problems that have afflicted other news outlets.  Reporters and editors aren’t suddenly innumerate. They just don’t have the ability any more to weed out bullshit, even when the bullshit is so patently obvious as in this news release.

If only 29% of employers plan to hire next year – or 20% in the United States version of the survey – rest assured of one thing: the recession ain’t over.


30 December 2009

Top 10 Best/Worst Communicators of 2009

From Bert Decker, his list of the top 10 American communicators.

Some you will recognise and agree with.  Some you will recognise and wonder: “WTF?”


Top 10 Stories of 2009

No need for elaborate commentaries for this one. 

Here are the 10 stories that  - in the not so humble opinion of your humble e-scribbler - had a huge impact on Newfoundland and Labrador in 2009 and/or which will continue to affect the province into the future.

Odds are this list will look like all the other locally generated lists of top news story for 2009, even if the ordering may be slightly different.

  1. Cougar 491:  A tragedy that prompted a genuine outpouring of sorrow across the province and left a mark on psyche of many that just won’t go away any time soon. A public inquiry will examine offshore helicopter safety and make recommendations in 2010.
  2. H1N1:  The health pandemic dominated the news in the front of the year and again in the fall. People changed their habits and many organizations changed the way they conduct their affairs:  for instance, shaking hands in greeting was out for a while in many churches. In the end, this province wound up ahead of the country in percentage of population inoculated.  That’s something everyone can be proud of.
  3. The Recession:  It’s been walloping Newfoundland and Labrador much harder than many have acknowledged and the effects of the largest global economic downturn since the 1930s are being felt in everything from layoffs and temporary closures at mines to a continued increase in people from  returning to this province other parts of Canada because they can’t find work anywhere else.  Expect the recovery to take a while.
  4. Hibernia South:  So many people lined up to criticise the Hibernia deal over the past 20 years and everyone one of them turned out to be full of crap.  From Ian Doig to Bill Callahan to Danny Williams, they were all dead wrong.  Danny Williams was so wrong about give-aways he used the Hibernia royalty regime as the basis for his deal to bring more oil into production. The royalty regime hashed out two decades ago and adjusted in 2000 will pour billions into the provincial treasury. The new deal added a couple of tweaks but all the heavy financial lifting is coming via the old deal. The new deal will bring new oil ashore, swell provincial coffers, produce more jobs and set a foundation for future developments around the Hibernia oil field.  The development deal didn’t need all the hype and bullshit the provincial spin machine laid on it:  it could stand up on its own merits and garner well-deserved credit for the administration that delivered the signed agreement.
  5. Double political suicide:  First Trevor Taylor, then Paul Oram.  Two stalwart Tory politicians ended their political careers  - unexpectedly - in the space of a couple of weeks last fall and in the process sent shockwaves through the provincial Conservative party. When Tony the Tory has to write letters to the newspapers defending his team’s future viability, you know the province’s governing Tories were badly shaken. In the subsequent by-elections, the Tories swept one and lost one.  More political changes may well be on the way in the run-up to the 2011 general election.
  6. AbitibiBowater:  A carry-over from 2008, the closure of the century old paper mill at Grand Falls in March shock the economic foundations of the central Newfoundland town. The reverberations are still being felt. Plenty of people never imagined the company was serious.  Surprise!  They weren’t bluffing.
  7. Have Province:  The provincial economy finally generates enough revenue so the provincial government can deliver its constitutional obligations without hand-outs from Uncle Ottawa. Announced prematurely in November 2008, “Have” status arrived in 2009, much to the chagrin of some politicians. 
  8. No Hydro Lines Through Gros Morne:  “The argument was made, quite rightly, by people that you don’t want to create an eyesore in…one of our best tourism attractions in the province.”  Amen to that. There were other political climb-downs in 2009, but this one stood out because it was the most unusual one for the provincial government to stand on its haunches about in the first place.
  9. The ABC’s are over/The End of the Ig-man: The rapprochement between the revanchist provincial Conservatives and their federal cousins happened quietly but the fact it happened will wind up having a profound impact on politics in the province.  That’s especially true at the federal level where the sitting members of parliament have already been dismissed by the national media as DW’s bitches.   What will they do when the next federal writ drops?  What price might the provincial Tories have to pay to get back in Steve’s good books?  Will the whole thing fall apart? Only time will tell. The other half of this story is the Ignatieff implosion.  So much hype; so little delivery.  When their boring stuffy academic  - and an economist to boot – is more popular than yours, you can be assured there is a giant political crisis desperately needing attention.  The second half of the problem:  Bob Rae as the only apparent alternative.  Nice guy but an aging former premier is not likely to catch fire with the electorate.
  10. Darlene Neville. As Russell Wangersky already noted, this is just the latest in a series of problems with people hired to fill important jobs reporting to the House of Assembly.  The problems aren’t confined to one office or to one government administration.  The offices are important ones, however, so there is a pressing need to sort out how they are filled.  Maybe one solution would be to get cabinet out of the game entirely and leave the running of House offices to a special committee of the legislature. 


29 December 2009

Kids say the darndest things

Before Christmas Memorial University political science prof – and former Williams administration spin-meister -  Alex Marland had some choice observations about his former boss and said boss’ apparent popularity with voters.

Umm, that bit of context didn’t appear in the Telegram story, by the by, even though it is more than a wee bit relevant to the story.

But anyway, Marland had this to say:

"It's something in political science we call economic regionalism," he said, explaining Williams is seen as somebody who's not trying to favour any particular group. "It's almost like he's trying to help out the Newfoundland society as a whole," Marland said.

Williams has also learned to target his anger and desire for reform against outsiders, he said, like Hydro-Quebec, New Brunswick or Prime Minister Stephen Harper, as opposed to people in the province.

Target his anger outside the province?

That’s what political scientists used to call bullshit.

Just ask all the traitors and quislings just exactly how far outside the province political anger gets targeted.

And economic regionalism?

Let’s just say that Marland was about as far off base on that one as he was on the anger ball thing.


Scenes from a parking lot: recycling at Walmart

Discarded chewing gum is used to pave in front of every Walmart.


Scenes from a parking lot: Big Truck

There’s is no amount of l’il blue pills that can overcome the inadequacy symbolized by the honking great, brand new pick-up trucks to be found in parking lots around St. John’s these days.

Just sayin’.


The Cure and The Disease

The guy who tried to blow up a Christmas Day flight to Detroit hid two containers of flammable materials inside his underwear.

His unsuccessful effort  - he set fire to his own scrotum and created some minor panic – end when passengers seized him and doused the smouldering bits of his crotch with anything liquid close to hand.

In the security,  American and Canadian authorities made it even more difficult to get on an airplane in the first place without actually making it any less likely that someone with stuff secreted around their genitals can get on an airplane in the first place.

The initial response included manual searches of carry-on baggage.

Remember that the guy hid the package next to his package not in his luggage.

They also conducted pat searches.

Again, unless they grabbed everyone’s package the odds of finding a little do-it-yourself flame kit would be slim.

Now the geniuses who now decided passengers can’t take a whiz in the last hour before landing  - will they now hand out catheters at check-in? - have decided to ban carry-on luggage.

Not surprisingly, real security experts – as opposed to the Mensa masterminds actually in charge of security screening at airports – are pointing out that the stuff happening across North America this holiday season is nothing more than theatre.

That’s right.

A show.

Something to make it look like they were doing something to prevent loons with glowing Johnsons from getting on airplanes.

And in the process they have virtually guaranteed the airline industry will lose passengers.


Innu seek halt to water management application

In a 51-page letter filed with the public utilities board on December 15, the Innu of Ekuanitshit are asking the border to refuse to approve any agreement or suspend NALCOR’s application based on NALCOR’s failure to adequately consult with them as provided under the Constitution Act, 1982.

Specifically, the Ekuanitshit Innu are seeking:

AN ORDER refusing to approve the agreement or, in the alternative, suspending Nalcor’s application and setting aside for future examination the duty to consult and accommodate the Innu of Ekuanishit; and

AN ORDER: that on an interim basis and in any event of the cause, Nalcor pay all expenses incurred by the Conseil des Innus de Ekuanitshit in connection with Nalcor’s application to the board, including costs of counsel, engineers, valuators, stenographers, accountants and other experts or assistants retained by or for the Conseil des Innus de Ekuanitshit in and about the inquiry; and
that Nalcor and the Conseil des Innus de Ekuanitshit are to attempt to agree on a procedure whereby, upon incurring costs and disbursements from time to time up to the end of the inquiry, trial, the intervenor will so advise the applicant and the applicant shall
pay them within a given time-frame, unless Nalcor objects, in which case it shall refer the matter to the Board.

The application for costs is based on the magnitude of the project, the scope of the potential infringement on the Innu’s aboriginal rights and the Innu’s lack of financial resources.

In a separate 143-page letter dated December 21, 2009, the Innu of Uashat Mak Mani-Utenam make the same application to the public utilities board.  Both letters include commentaries on aspects of the NALCOR proposal for the Lower Churchill.


TWINCO seeks intervener status in water management decision

The Twin Falls Power Company is seeking intervener status in the hearings at the public utilities board into the water management application by NALCOR Energy for the Churchill River.

In a letter dated December 17, 2009, TWINCO president James Haynes said his company may be affected by any decision in the application.

2. Twinco has a Sublease with Churchill Falls (Labrador) Corporation Limited ("CF(L)Co") whereby CF(L)Co is obligated to supply 225 MW and 1.97 TWh of power and energy to Twinco, included as Exhibit 4 of the Application. Twinco supplies power to two customers, 10CC and Wabush Mines, both of which are located in Labrador West and as result Twinco could be affected depending on the disposition of this matter.

3. Twinco owns and operates two 230kv transmission lines that transmit power and energy from Churchill Falls to Labrador City and Wabush in western Labrador and as a result could be an affected transmission provider.

Twin Falls Power company is owned by Wabush Mines, IOC and  NALCOR with each company holding one third of the shares.  It supplies power to the mines in western Labrador. 


28 December 2009

The Imaginarium of Spin-doctor Marshall

According to finance minister Tom Marshall, estimated growth in the province’s population is due to people flocking home to find work.

“More people moving to Newfoundland and Labrador represents a further sign of confidence in our economy, way of life and the plan the Williams Government has put in place to continue along a path of stability and prosperity,” said Minister Marshall.


They are being drawn to the province by its supposedly buoyant economic prospects, right?

Well, if that’s the case, the good spin-doctor of finance might want to explain why the employment levels in the province in November were actually lower than they were the year before.


Don’t bother asking.

The answer is readily apparent.

People are leaving places like Alberta because there are fewer job prospects there than there used to be.

That’s a trend some people have noticed for some time now.  In other words, the growth in the provincial population over the last year and a half or so is actually not due to all the splendiferous tax cuts and other budgetary bunkum the provincial government spin machine claimed.

Even if some bank economists have been fooled  - badly – the reality is something other than what the provincial government claims and the conventional media dutifully reports.


The fly in the soup clinging to the hair

Writing in the Globe on Christmas Eve, Fabrice Taylor noted the strong performance of Labrador iron ore in the market place, bouyed by increased global demand.

Then he notes the relatively high value of the Canadian dollar against its American counterpart. 

The hair in the soup is the Canadian dollar. Part of the drop in Labrador's financials, mentioned above, is because of volumes and pricing, but a good part is also from foreign exchange. Some pundits see the dollar going to par with the greenback. That's only another nickel or so but it would hurt.

He’s right.

But the exchange rate isn’t the only thing in the soup threatening the fine meal. There’s a fly in the soup, as well, namely the medium to long term cost of operating the mines in western Labrador.

That’s not a labour problem or a dollar problem or a market problem or an ore problem.

It’s an energy problem.

Or more specifically the threat by the provincial government back in 2006 that it would expect the mines in western Labrador to start paying commercial rates for power come 2014. 

And if commercial rates weren’t in the cards, well, the mining companies expect to be paying considerably more than they are currently

Never mind that the companies own two thirds of Twin Falls Power Company, built near Churchill Falls when it was still called Hamilton Falls.  And never mind either that the companies agreed to shutter their power station so BRINCO could push more water through its new plant at Churchill Falls.  In exchange the companies got a block of power for about half a cent a kilowatt hour and anything beyond that for about a quarter of a cent per. 

Either way, the prospect of higher power costs will play a role in the future of Labrador west.  Low cost power will be crucial to sustaining the mines, especially in a high dollar world, so when threats get tossed around companies tend to take notice. 

That threat is till out there.

Plus the threat’s been reinforced by the seizure last Christmas of hydro assets belonging to three companies, one locally owned and the other running a project not connected at all to the paper mill at Grand Falls.  Longstanding agreements were brushed aside by a simple vote in the legislature.  Agreements entered into in good faith and executed in good faith were crushed overnight, forcing at least one of the companies involved to default on loans.  A court case was extinguished without compensation.  Any company with any sort of operation in the province would have been insane not to revisit all their legal options.

And in Labrador west, it would be at all surprising to find out that the companies operating mines there are keeping a wary eye on what happens in St. John’s.  That power contract issue hasn’t been resolved yet and it’s much more a looming crisis than anything connected to the Churchill Falls renewal in 2016 could ever be.

Hair in the soup?

Try a fly.

And a geezly big blue bottle one at that.


26 December 2009

Where’s Adolph?

Interfax added to the controversy over the whereabouts of Nazi leader Adolph Hitler’s remains in early December with a story from the Russian federal security bureau – successor to the State Security Committee (KGB) – that claimed KGB boss Yuri Andropov ordered Hitler’s body cremated and the ashes scattered in 1970.

The story is essentially the same one which has been circulating since 1968 and which was confirmed by an examination of documents in the state security archives in Moscow in the early 1990s.

Hitler’s body along with those of Eva Braun and the Goebbels family were dug up from their grave at a Soviet intelligence base at Magdeburg where they had been buried secretly after the Second World War.  The  location is incorrectly identified as a military base in some accounts. it actually belonged to a Soviet intelligence organization that operated in and with the Red Army.

Soviet officials feared that the grave site would become a haven for anti-Soviet/pro-Nazi sentiment if it were discovered. The Soviets moved from the facility (reportedly at the site now having he civic number Klausener Strasse 32) at Magdeburg in 1970.

Soviet soldiers reportedly found the remains near the Chancellery bunker where Hitler and the senior German leadership lived during the last days of what the Soviets called the Great Patriotic War. Hitler reputedly shot himself.  Braun – whom he had married shortly before the suicide  - reportedly took poison.  Nazi propaganda minister Joseph Goebbels and his wife Magda also took poison after murdering their six children.

In 2009, a American research team claimed to have examined a portion of a skull displayed still held Russian authorities and purported to be that of Adolph Hitler.  The Americans said the skull belonged to a woman between ages 20 and 40.

The skull and lower jaw held by Russian authorities were supposedly retained by the Soviet intelligence unit that had found the Nazi leaders remained in 1945, buried them and then later cremated them on Andropov’s orders.

In some accounts Russian authorities deny that the Americans had been allowed to examine the remains at all.


22 December 2009

The Written Word Round-up

1.  Rewriting the rules of defamation.  The Supreme Court of Canada hands down a landmark ruling on two defamation cases and in the process changes the country’s defamation rules.

The defence will operate in favour of the media outlet, “if it can establish that it acted responsibly in attempting to verify the information in a matter of public interest,” Chief Justice McLachlin wrote.

“The public interest test is clearly met here, as the Canadian public has a vital interest in knowing about the professional misdeeds of those who are entrusted by the state with protecting public safety,” Chief Justice McLachlin said. "The defendants' liability therefore hinges on whether they were diligent in trying to verify the allegations prior to publication, and it will be for the jury at a new trial to decide whether the articles met this standard of responsibility.”

2.  But did he have to ask where he left his own sock puppets?  A Quebec writer reveals that she has been writing a blog under a male nom de plume and doing better at it financially than under her own name.

3. But how will the great unwashed masses know what is true if reporters and editors do not tell them?  Yet another conventional journalist raises questions about the wild and uncontrolled world of the Internet:

Seeing as how information dissemination has become so easy, a lot of information might reach millions of people unfiltered. While this provides a great opportunity for the truth to reach millions, we may also be flooded by faulty, incomplete and outright wrong information, as well as malicious attack and some plain lies.

Amazingly enough people might cope just as they have coped with “faulty, incomplete and outright wrong information” in the conventional media.  Heck, they might even find stories that never get covered at all by the conventional media even though they are entirely true.

They might even manage to find a personal relationship with accurate information that does not require the intervention of self-appointed High Priests.


The Hippopotamus Song, Flanders and Swann version


21 December 2009

They can’t re-blackball him

Publisher Craig Westcott’s recent editorial from the Business Post has found its way to a New Brunswick newspaper.

Wonder what the locals will do besides despatch another of the Premier’s fanboys to post a comment on the piece?

It’s not like they can re-blackball Westcott from government interviews.


I want a hippopotamus for Christmas

The song that is driving people insane.


Rumpole and the Christmas Honours List

Word coming from the clerks’ room at Iniquity Court has it that on Tuesday next the province’s justice minister will announce recipients of the cabinet’s appointments to the provincial court bench.

There are four slots open, as Bond Papers readers already know. Some of them have been vacant for a year.

Who will make the Honours List?


20 December 2009

Yipppeee! Bring on those higher energy prices

From the New York Times:

In 2009, some 31,000 households in Rhode Island will have their utilities shut off, and the effort to juggle energy bills and mortgages is helping push some homeowners into foreclosure, said Henry Shelton, director of the George Wiley Center, a consumer advocacy group here. (Here, as in many states, utilities may not disconnect the poor in the winter.)

Since 2000, the cost of heating a home with fuel oil has more than doubled and the cost of heating a home with electricity has risen by one third, outpacing many incomes. The recent surge in unemployment has thrown even more people into energy debt.

High energy prices will hamper any recovery in the United States.

Hindering a recovery of the American economy will screw everyone who depends on exports into the Untied States as a staple of their own economy.

Like say Canada generally and Newfoundland and Labrador in particular.

Any fiscal plan built on perpetually high energy prices is inherently flawed and prone to failure.

Catastrophic failure.


Kremlinology 13: the seat by the door

the seat by the doorUsed to be Ray Hunter, a backbencher who reportedly had his fair share of differences with the direction some things went.

Now it’s Wade Verge.

Wade’s seat is as far from the Speaker’s chair as one can get on the government side of the legislature and it is right next to a door everyone uses to go in and out.  It is not exactly prime real estate.

It may also be a clue as to who is in favour and who better mind their “P”s and “C”s.

That’s not the only peculiarity in the House of Assembly seating chart.  Usually when the government side has too many to sit on the government side, they tend to stick the lowest seniority fellows over with the Opposition.

Not in the current session.seating 2

There’s the last Boy Scout, Steve Kent, marked by the red “1”, accompanied by a whole bunch of other fellows of about the same or more recent vintage. And truth be told that’s where Wade and Harry should be.

But they aren’t.

Instead there are a trio of parliamentary assistants  - designated by the red “3” - who ought to be over closer to their ministers so they could confer on important matters without having to walk all the way around behind the Speaker.  They are pseudo-ministers after all and as such should be over with their fellow assistants. They should be in the seats on the very back of the government side and the crowd up by the Speaker (marked by a red “2”) should be back one tier.

Now that other crowd of red “2”s on the right there are also a bit out of place. The middle tier of that last block down on the right there seem to be a bunch of ministers who don’t hold a high prominence in the cabinet.  proximity to the Premier and the Speaker are huge clues to prominence in the usual way of seating people.

Oddly enough, that would include Ross Wiseman who, while he gets a front bench space due to seniority perhaps, is still only a couple of steps from being out through the centre doors (denoted by the bit of a bracket on the extreme right). His distance from the Premier and the Speaker seems a wee bit odd.

Now all of this might mean nothing at all.

But then again, this whole Kremlinology thing started with Trevor Taylor.


19 December 2009

Hebron Project Timelines

For those interested in this sort of detail, and from the good folks at the Hebron project website, comes this picture of the project timelines:

 Hebron timelines chart

Note that the partners don’t anticipate giving this project the green light until the early part of 2012.


Significant digits: December 2009

1.  Number of days Tom Rideout was premier:  43.

2.  Number of days the House of Assembly sat in 2009:  43.

3.  Average number of days the House of Assembly has sat each year of the current administration (since 2004): 43.

4.  Number of provincial Conservatives in the House of Assembly:  43

5.  Number of boil water advisories in effect in Newfoundland and Labrador as of June 2009,  the last date the list was updated:   239  (Some communities were affected by more than one boil water order.)

6.  Total number of boil water advisories in the province as of April 1, 2008:  228.

7.  Total number of communities affected by boil water advisories in the province as of June 2009:  174.

8.  Total number of communities in Newfoundland and Labrador: 593. (Yes, that means 29% of communities had at least one boil water advisory in place in June 2009.)

9.  Longest time under boil water advisory: 20 years 11 months (Branch, 01 Jan 1989.)

10.  Total number of days in which someone made reference to boil water advisories or drinking water quality in the House of Assembly since 01 January 2008:  2.


Hitchhiker’s Update:

42, forty-two

18 December 2009

Purely coincidental: Hydro-Quebec/NB Power version

Some of these things are linked.  Some may be purely coincidental.

1.  Hydro-Quebec plans to buy NB Power including the Point LePreau nuclear generating plant.  October 29.

2. Ontario Senator Lowell Murray thinks it’s time for the federal government to get interested in the Hydro-Quebec/NB Power thingy. December 15.

3.  Ontario considering sale of hydro-electric generation, transmission and distribution assets. December 16.

4.  Government of Canada announcements plans to sell off the Candu reactor division of Atomic Energy of Canada Limited.  December 17.


“Everything else is advertising.”

Sometimes, things that don’t appear to be connected things scream out to be connected.

Take, for example, a piece last weekend in the Globe on one of the legends in the newspaper business.  Harry Evans was in Toronto flogging his memoir, My paper chase. He thinks that news is whatever anyone tries to suppress.  “Everything else is advertising, ” he contends.

On the same weekend, a Telegram editorial revealed that the local daily tried to get government polling results this past August but came up with six blacked-out pages. Proprietary information don’t you know and there was just no way the government could release stuff that belongs to a third party and still comply with the province’s access to information act.

News is what The Man wants to suppress, sez Harry.

Not in this case.

That story of the blacked out bits  - the suppressed bits - never made it to the news pages. The Telly did run a story last September based on a few pages of numbers that the government did happily send out but the full-on research report story doesn’t seem to have made it to the news section.

And the story that did appear took such a high-level picture it missed some of the details within the numbers they did have.  It wound up telling you – in the very first two sentences -  that:

Residents of the province are split on their satisfaction with the government's handling of health care, according to recent polling commissioned by the Williams administration.

Satisfaction levels in other areas, however, remain high.

This is hardly news for anyone who has been reading the CRA polls as if they actually had something to say that didn’t exaggerate the actual results they got. The rest of the story didn’t add anything else.

Now this way of handling the suppression of polling information is rather odd. The questions being asked would potentially be very controversial stuff. After all they were questions like:

  • Do you think Newfoundland and Labrador has benefited since joining Canada in 1949?
  • Do you know anybody who's left the province to work in Alberta in the past six months?
  • Do you consider yourself foremost a Newfoundlander, a Canadian, or something else?

and according to the Telly-torial:

Other questions touched on topics such as the phasing out of pesticide use and the image of the commercial seal hunt.

All pretty obviously related to public policy and all pretty obviously no the stuff covered by section 27:  “trade secrets of a third party, or … commercial, financial, labour relations, scientific or technical information of a third party…”.  Yet that was the basis on which the provincial government kept the information secret.

So at the end of it all we wind up with information being suppressed and the story about the suppression winding up as an editorial. And the bit on polling that did wind up on the news page was little more than the usual advertising copy that polling results have become in this province’s news media. Sometimes the ad copy comes with third-party endorsements from people supposedly with absolutely no connection to the subject of the story either.

Not so long ago, such blatant suppression of information that legitimately belongs in the public domain using a trumped-up excuse would have prompted a much sterner response and not one confined to the editorial page.

Things have changed, though, as Harry noted and as pretty well everyone dealing with news media can tell you. The change is not glacial, either, well at least not the way glaciers used to melt in the days before Al Gore.  Rather the transformation of newsrooms is as easily seen as the curious drop in online viewers highlighted by a couple of earlier posts.

The pressures in newsrooms are well known.

Other stuff that adds to the pressure may not be so well known or sufficiently appreciated for what they are and what they do: the nasty  - and often-time orchestrated – comments, short public attention spans and memories, The Attitude about advertising and what it buys, and even editors who publicly criticise the milquetoast reporting of today as too aggressive.  All add up such that it becomes much much harder for the crowd in the newsroom to do what Harry did and what many of the reporters and editors might like to do.

This is not a local phenomenon alone. It is also something that isn’t confined to one single outlet and it certainly isn’t affected by corporate ownership.  The problem  applies as equally to news outlets owned by large corporations as it did to a locally-owned vanity publishing enterprise that died twice. So-called independent media, that is stuff that isn’t corporately owned, also brings its own problem of rather strong ideological biases.

This is not a post which reaches a logical or orderly conclusion.  Frankly, your humble e-scribbler can only note the phenomenon just as with the curious drop.

But there is no mistaking the connections among a bunch of things you might not think were actually related.


17 December 2009

Public execution delayed for Speaker’s Christmas Party

Under Standing Order 9 of the House of Assembly, it’s pretty simple:

9. If at 5:30 o’clock in the afternoon except on Wednesday, the business of the House is not concluded, the Speaker shall leave the Chair until 7 o’clock. At the hour of 5 o’clock on Wednesday afternoon the Speaker
adjourns the House without question put. (1951 SO 7 R&S 1999)

Deputy speaker Tom Osborne decided to toss the rulebook in the corner this afternoon during debate on a resolution to fire child and youth advocate Darlene Neville.

The business of the House was not concluded at 5:30 pm.

There was no prior motion to extend the sitting or vary the rules.

Osborne simply interrupted the speaker who had the floor and put the whole teaparty1show off until Monday.

The reason?

The Speaker’s Annual Christmas party – right, not exactly as illustrated -  was scheduled to start at 5:30.


Harvest Energy sold

Harvest Energy Trust announced today that the trust has been sold to Korea National Oil Company (KNOC).

Included in the sale is the oil refinery located at Come by Chance, Newfoundland.

Until this sale, KNOC operated only one other project in Canada, the BlackGold oilsands operation acquired in 2006.


Hebron cuts: Dunderdale blunders; will NALCOR alone foot bill for replacement work?

In the House of Assembly on Wednesday, natural resources minister Kathy Dunderdale confirmed what Bond Papers told you about on December 11:

There are no provisions of the final benefits agreement signed in August 2008 that cover a work cancellation and mandate that it has to be replaced by work of equal value or the cash equivalent.

Nothing could be further from the truth

Dunderdale issued a highly misleading news release on December 11 that claimed “any such issues were contemplated in the Benefits Agreement and the replacement value of the work was captured and protected."

As you learned here last week, nothing could be further from the truth.

Dunderdale told the legislature on Wednesday (December 16) that the agreement contained a provision on amendments and another on dispute resolution. There was no dispute, according to Dunderdale, as the parties came together and achieved an agreement.

Well that’s not the same as having “the replacement value of the work”  already “captured and protected”.  That’s not  “copper-fastened”, either as Dunderdale also claimed. That’s people getting together and hammering out a new deal which could include provisions among the partners as to who will foot the bill for what amounts to a political decision – the replacement benefits – rather than a purely commercial one.

. And as for that section on amendments, here it is in its entirety:

12.3 Amendment.

No amendment to this Agreement is effective unless made in writing and signed by authorized representatives of all Parties

Nor is the new deal an actual, finalised agreement.  As Dunderdale told the House of Assembly, there is an agreement in principle that must now be translated into a legal document.  There’s still lots of room for further changes, in other words in a project not due to be sanctioned until 2012.

Abandon Ship!

By the end of the questioning, Dunderdale became so rattled that she abandoned her false claim last week that the benefits were secured within the agreement:

Mr. Speaker, the parties came together, we did not even need to use mechanisms provided in the Hebron Benefits Agreement. [Emphasis added]

That pretty much blew what was left of her credibility out of the water.

Dunderdale also disclosed that the total value of the cancelled work is less than $50 million.  Her office earlier refused to disclose what they claimed was commercially sensitive information.

The Hebron partners – including the provincial government’s NALCOR Energy -cancelled the work because it was deemed “uneconomic and has significant execution and schedule risks” for the project Dunderdale estimates may cost as much as $7.0 billion.

NALCOR to foot bill?

If the agreement in principle is actually signed, it is unclear at this point if the $50 million of replacement work will be provided by the oil companies or by the provincial government’s energy company in its capacity as an equity partner on the project.


16 December 2009

The die is cast aside

“The die is cast!”

That’s what then-education minister Joan Burke said back in 2007 when the current provincial administration unveiled its plan to give Sir Wilfred Grenfell College something called “autonomy” from Memorial University. 

She was arrogantly dismissing concerns raised about the feasibility of creating a second university in the province.

Burke even used the word “independent” in a news release in 2007 - “Grenfell College is about to gain independence…” – something she predicted would happen in 2008. 

Well, in 2009, none of the promises came true.

And you can tell none of the promises came true because the announcement was made by Darrin King, the education minister, and not Danny Williams, the premier behind the whole drive.

You can also tell there’s nothing to get excited about because the release is gigantic – 13 paragraphs – and there are no fewer than five media contacts.  The way these things usually go, the less positive news there is, the more names are listed as media contacts.

Under the proposed approach, Grenfell will lose its separate and proud identity, becoming instead something to be called Memorial University  - Corner Brook.

It also won’t get a separate president or senate, as recommended by two consultants hired in 2005 to look at the whole idea of Grenfell “autonomy”.  Their Option 1A was the one supposedly on the books to be implemented.

Instead, the current senior official – named the Principal – will continue to be called the Principal and will report directly to the President of Memorial.  And there will be a separate budget presented to government through Memorial University in St. John’s.

Whoopee ding.

The whole thing looks suspiciously like the consultant’s Option 2A  but without the administrative clout of having a separate president for the new university at Corner Brook.

And what were the disadvantages noted for that by the consultants, you may ask?

  • common Senate reduces Grenfell’s academic autonomy and
    development potential;
  • little change from current unsatisfactory situation.

That’s right.  The consultant’s considered that the approach government ultimately  would actually reduce Grenfell’s autonomy and offer little change from the status quo.

Looks like the die for Grenfell autonomy Joan Burke talked about wound up getting cast alright, cast aside.

Expect lots of negative reaction to this as the magnitude of the broken promise starts to sink in for people in Corner Brook.


15 December 2009

The Placentia Bay Nostradamus

If the Telegram editors ever get jammed up for copy, they could easily recycle Ray Guy columns from 40 years ago. 

Most people wouldn’t be able to tell the difference between goings on then and now.

Back then, partridgeberries were the economic salvation of this cove or that harbour.  These days, cranberries will replace the income from a pulp and paper mill in Grand Falls.

Back then people were complaining about the great partisan conspiracy against the beloved saviour of His People.

These days, Bill Westcott is lacing into Peter Pickersgill on much the same basis. Poor Pickersgill has the extra misfortune of not only being the progeny of mainlanders but of being not pur laine hisself:

Despite spending a lot of his adult life in Salvage, we must remember PIC is not even an (Island-born) Newfoundlander, one of da boys! His genes, I think are rooted in Winnipeg and Ottawa.

That explains everything, of course.

There is no way the truth could be known by someone who wasn’t born here or who doesn’t live here.

Sure John Hickey said so dealing with another one of the confounded traitors:

Of course Mr. Waugh is entitled to his opinions on any and all Labrador matters, even as he writes from the comfort of his Nova Scotia home.

And Bill Westcott? 

He writes his truth from Florida.

That must be Florida, Bonavista Bay.


Bon Deal. Bad Deal.

Turns out buying NB Power could be a very bad deal for Hydro-Quebec.

Of course, that would make it a very good deal for New Brunswickers.

Update:  As Mark correctly noted in a comment, a bad deal for one doesn't make it a good deal for the other.

If you read the article, though, you will see that many of the points made early on discuss what are the positive aspects for New Brunswick.  There are positive aspects for Hydro-Quebec as well; the variation just depends on what the price of power turns out to be down the road.

And of course, by the end of the article, Claude Garcia  of the Montreal Economic Institute, makes an argument based about MEi's projections for power prices over the medium- to long-term.

Despite the huge difference between the price offered and the real value of the assets being acquired, no allowance is made for the increase in electricity prices likely to result from the enforcement of a new international treaty significantly limiting carbon emissions. This deal is not acceptable as currently structured. The price is too high for the benefits to be obtained.Despite the huge difference between the price offered and the real value of the assets being acquired, no allowance is made for the increase in electricity prices likely to result from the enforcement of a new international treaty significantly limiting carbon emissions. This deal is not acceptable as currently structured. The price is too high for the benefits to be obtained.


Eight appointed to Order of Newfoundland and Labrador

His Honour John Crosbie inducted eight new members  into the Order of Newfoundland and Labrador in a ceremony at Government House last week.

orderpicture2 The inductees to the Order are Gerard Blackmore, Donna Butt, Jon Lien, Hazel Newhook, Gladys Osmond, John Perlin, and Margaret Pike. Alan Perry was invested as an honorary member of the Order of Newfoundland and Labrador. Geoffrey William Stirling will be inducted at a later time.

The Order of Newfoundland and Labrador recognizes individuals who have demonstrated excellence and achievement in any field of endeavour benefiting in an outstanding manner Newfoundland and Labrador and its residents. An individual who is not a Canadian citizen or current or former long-term resident of the province, but who has demonstrated excellence in their field, and has benefited the province and its residents in an outstanding manner, may be nominated as an honorary member.

As Chancellor of the Order, the Lieutenant Governor presented an insignia of the Order, a stylized pitcher plant, to each inductee, as well as a miniature of the insignia, a lapel pin and a certificate signed by the Chancellor and sealed with the Seal of the Order.


Net debt and liabilities

In the next of this series of snapshots of the provincial government’s financial state, let’s take a look at few more charts.

First, there’s net debt.  That’s the sum of assets less liabilities.  This table was taken from data compiled by RBC economics from provincial budget documents going back to 1981. The scale on the left is measured in millions of Canadian dollars.

net debt 81-09f That big jump in 1993-1994 can be directly attributed to changes in federal transfers instituted to deal with the federal government’s financial problems and the recession which had begun three years earlier.

The jump in 2003 is one your humble e-scribbler can’t readily explain and there seems to be some discrepancy in the government’s financial statements.  RBC has used the second set of figures but there seems to have been a revision done in 2004 to the figures for the previous year.

The big drop over the two years between 2006 and 2007 is attributable to one thing and one thing only:  a doubling of the provincial government’s financial assets, basically represented by temporary investments. That’s all oil royalties flowing from  deals struck before 2003.

So when you see the provincial government crowing about debt reduction, they are really talking about the increase in cash they have, not the real reduction in liabilities. There is $1.8 billion in temporary investments held by the provincial government directly and another pile of cash and on-financial assets in various agencies and Crown corporations that brings the total assets up to $4.4 billion.  The $12.4 billion in liabilities minus the $4.4 in assets gives you the current net debt of $8.0 billion.

That’s clear from the second chart which shows only the liabilities as presented in the Public Accounts from 1998 to 2008.

liabilities 1998-2008 The dip in liabilities in 2007 into 2008 comes from a drop in the unfunded liability in public sector pensions.  That number was cut in half by a combination of spending by the provincial government starting under Grimes and continuing under Williams.  But the biggest part of the drop is directly attributable to the $2.0 billion one time payment from the federal government in 2005.

Now some smarty-pants will notice that there hasn’t been a huge drop since 2005 that would equal the $2.0 billion plus a few more contributions that brought down the unfunded liability.   Well that’s because there have been some other liabilities incurred since 2005, like some new borrowing.  Overall, though, there has been a reduction in the total liabilities with the biggest reduction being the change in unfunded liabilities. 

Incidentally, that pension liability is still there but there is now cash to deal with it. 

Now as a last chart, let’s take a look at the net borrowings numbers.  We looked at the net borrowings per capita, but let’s look at the actual net borrowing figures for the past decade. Remember that  net borrowings are the total amount borrowed less any money set aside to pay the debt when it comes due.

net borrowing 98-08 Net borrowing is about a billion dollars higher than it was a decade ago.


14 December 2009

Hebron changes: uncertainty over implications of work cancellation

Under questioning in the House of Assembly on Monday, natural resources minister Kathy Dunderdale couldn’t point to a section of the benefits agreement that allowed a replacement of work cancelled by the Hebron partners in September.

Dunderdale could only say that there was an unspecified “sub-agreement”. 

She’ll probably have trouble finding the magic clause she thinks is there.  The benefits agreement is specifically identified as a stand-alone document that isn’t affected by other parts of the overall deal except as provided within the benefits agreement.  There’s no section that refers to offsets for cancelled work.

Dunderdale told the legislature the provincial government was represented through NALCOR Energy as the equity partner when the decision was made to chop the “sub-sea drilling template and the components of the field mooring system and positioning and docking system.”

However, when asked about the potential impact on communities like Marystown, Dunderdale answered as if the provincial government didn’t have an equity stake:

Mr. Speaker, some of these questions are better put to the operators to explain the scope of work, the magnitude of work, the kind of expertise that is required and the kind of services that are going to be required to do this work. All we can do, as a government, is negotiate an offshore oil and gas project with specific benefits around the kind of work that is required to construct. In this case, Mr. Speaker, modification needs to be made in order to reduce delays and proper execution.

She’s right, of course.  The 4.9% stake amounts to exactly nothing when it comes to substantive decisions if the government acts as an oil company/partner. The Big Players needed to “reduce delays and [ensure] proper execution” and the provincial government – apparently reduced to a bit player -  simply followed along.

That evident lack of control exercised by the provincial government is the opposite of what people were told when the equity stake idea was being sold politically. But it is consistent with the spirit of a section of the financial agreement that obliges the provincial government to back the oil companies on any regulatory issues as the oil companies see fit.

The Hebron partners were originally supposed to submit a development application this month to the offshore regulatory.  However, the changes made to the fabrication program a year after final agreements were signed points to the potential for further delays.

The Hebron project is not yet sanctioned by the partners.  Under the agreement with the provincial government, they do not have to sanction the project – that is approve it for development – at all.  They don’t have to green-light the development even if the project clears regulatory approval.

The final agreements signed in 2008 provided for less oil and possibly fewer local benefits than the 2007 memorandum of understanding.


Net borrowings up since 2000


Net borrowing per person is higher now than it was in 2000, according to the province’s audited financial statements.

net borrowing 00-04In Fiscal Year 2000, net borrowings  - accumulated borrowing less money set aside to pay off debt when it comes due (sinking funds) – stood at $10,684 per person in the province.

The number hit $13,074 in 2004 and has stayed in the same neighbourhood ever since.  Part of the reason for that is a drop in population since 2004.  The other reason is the increase in net borrowings since 2000.  Net borrowings increased in the period from $5.8 billion in 2000 to $6.6 billion last year.

net borrowings 04-08



13 December 2009

Energy audio and video roundup

1.  From CBC New Brunswick, a panel discussion involving the leader of the New Brunswick Conservative, Green and New Democratic parties and energy minister Greg Byrne.

2. From CBC Newfoundland and Labrador on 01 Dec 09, an interview with former premier Roger Grimes on the latest developments in the Churchill Falls saga.

3.  CBC Radio Crosstalk with guest Jim Feehan discussing Churchill Falls.

4.  Premier Danny Williams scrums with reporters after a speech in Calgary. At no point does Williams point out for the Alberta reporters that he spent five years trying to get Hydro-Quebec to take an equity stake in the Lower Churchill without any discussion of redress for the 1969 contract but couldn’t get them interested.  That was at the same time that he insisted that he wouldn’t cut a deal with HQ without redress.


Indebted to Ottawa

The provincial government owes the Government of Canada more than a half a billion dollars in a combination of overpayments for federal transfers and a loan received in 2005.

That’s according to figures contained in the provinces audited financial statements known as the Public Accounts. The federal debt for 2008 was $535,150,000 down from $568,247,000 in 2004.

But in  Fiscal Year 2004, the total amount owed to the federal government stood at $191 million, made up entirely of accumulated overpayments for Equalization and health and social transfers.

In the way the transfers are made, overpayments occur for every provincial government and every provincial government has some level of debt from this source. The overpayments result from the difference in using estimates of taxation and population to make calculations in advance and then comparing those with actual performance calculations made after the payments are set and dispersed.

In Newfoundland and Labrador’s case, the provincial government  - and some other provinces – took advantage of a federal interest free loan in 2004.  Under a measure announced by then finance minister Ralph Goodale, provincial governments who had qualified for Equalization in the preceding the years could qualify for an interest-free loan from the federal government. 

Newfoundland and Labrador received a loan of $378.4 million.  About $100 million of that has been repaid.


On the one hand…

Jean-Thomas Bernard, economics professor at Laval, finds the Hydro-Quebec move to the Maritimes a bit puzzling since he believes that HQ will have to bring expensive power online to feed the Maritimes.

"My position is that cheap hydro is gone, definitely gone," Bernard said.

"We still have a fair amount of (undeveloped) hydro but this is expensive hydro. We're talking about 10 cents (per kilowatt hour), 12 cents," he said, referring specifically to the Romaine megaproject far from Montreal on the province's north shore - poised to begin bringing 1,550 megawatts of power online for Hydro-Québec in 2014.

On the other hand, Jean-Thomas Bernard also thinks that New Brunswick would actually win from this deal:

However, Bernard said in the long-term Hydro-Québec may regret this deal because the corporation may wind up selling its power to New Brunswick at a much cheaper rate than to its other customers in the United States or in Ontario.

The same issue is at the heart of both Bernard’s comments.  He is looking at the pricing issue and the cost of developing new power projects.

In the short-term HQ gains markets;  in the medium to long term it may face a situation where it could sell the power more lucratively elsewhere but be forced to sell at lower prices in New Brunswick under the terms of the MOU.

It’s an interesting observation about a complex issue.

But here’s an idea for you to consider:  if La Romaine and other new HQ projects are being developed at the price of around 10 to 12 cents per kilowatt hour, how would the Lower Churchill compare to that?


12 December 2009

Prov Gov quietly buys into optical manufacturing

In 2008, the provincial government quietly invested $277,000 in First Choice Vision Centre according to the audited financial statements of government released recently by the provincial finance department.

There’s no news release or ministerial statement on the cash from either the business or innovation departments in 2008.

First Choice operates retail eyeglass stores across Newfoundland and also has a lens manufacturing facility.

The government received shares in exchange for the cash but there is no information on government’s website that gives any indication what the cash for for.

Unlike previous years, the 2008 audited financial statements contain no explanatory notes on investments.


Dead companies still on government asset books

The provincial government is still carrying shares in two dead companies on its books as assets even though the companies are now out of business and the chances of recovering any cash from them is virtually non-existent.

A total of $1.0 million in shares in Consilient and SAC Manufacturing are still listed as investments in Volume II of the Public Accounts, the audited financial statements for the provincial government.

SAC Manufacturing went out of business less than six months after the provincial government injected a half million dollars into that company.

Consilient, a high technology company, went bankrupt last year. it was featured in a report by the province’s auditor general on investments that, among other things, lacked adequate documentation and security.

Unlike past years, the Public Accounts section that includes these companies doesn’t contain any notes on existing holdings and any new ones acquired during the year. There is only reference to $3.3 million being available to write-off bad investments. 

There is no indication any of the investments have been written off. 

That’s despite a note in the 2008 audited financial statements which said the half million dollars for SAC Manufacturing would be written off over a year ago:

During 2006-07, the Province acquired 500 Class “B”Common shares at a cost of $500,000. Commencing in June 2007,
these shares are conditionally redeemable based on after tax earnings. All shares must be redeemed no later than 19 December 2016.

During 2007-08, the company ceased operations and, as there is now no reasonable prospect for redemption of these shares, the full amount of the investment has been included in the provision for investment write-downs.

That’s not the only peculiarity in the recent work by the auditor general about one of these companies. 

An omnibus report on previous audits, released in November 2009, made up the recommendation related to original audit.  The report replaced the original list of five suggested changes and actions with one that wasn’t made originally.  The AG then reported that the innovation department was making progress on the phony recommendation.


11 December 2009

Hebron benefits not secured

The highly touted Hebron offshore oil project hasn’t completed environmental review, it hasn’t been sanctioned and there’s no development application yet but already the amount of work on the project is being scaled back, according to news release from the province’s natural resources department.

According to the release, project lead ExxonMobil has informed the provincial government that it won’t be building the “sub-sea drilling template and the components of the field mooring system and positioning and docking system.”

The release says the elements are “uneconomic and come with significant execution and schedule risks.”  Put another way that likely means the companies don’t believe the work can be completed in the province and the alternatives are too costly to consider.  The work will now be scratched entirely.

No provision for replacement in agreement despite Dunderdale claim

And while the provincial natural resources department claims the cancelled work will be replaced, there’s no guarantee that will actually occur.

The release quotes natural resources minister Kathy Dunderdale as saying that the provincial government “had the foresight to ensure that any such issues were contemplated in the Benefits Agreement and the replacement value of the work was captured and protected.”

There are no provisions of the final benefits agreement signed in August 2008 that cover such a cancellation.

And what’s more the release confirms there’s no such provision when it states that:

An amendment to the Benefits Agreement will now be developed by the parties to implement this arrangement.

If the situation was already “captured and protected” there wouldn’t need for an amendment – that is, a change – to the benefits agreement.

The benefits agreement contains a clause (3.3) which exempts the companies from having to provide any benefit contained in the agreement unless the offshore board approves the benefits plan, the federal and provincial ministers approve the plan and the project is sanctioned.

At least two of those three preconditions have not been met.

The agreement does contain a dispute resolution mechanism.  There’s no indication if that has been triggered or if it may be triggered should the companies and government fail to agree on replacement benefits.

Valuation of cancelled work “commercially sensitive”

But wait:  it gets better.

The same news release claims that “[s]hould the operator be unable to identify an equivalent amount of replacement work by June 30, 2010, a payment will be made to the province equal in value to the amount of work not replaced. These funds will then be used by government for a construction project for the benefit of the oil and gas industry.”

The public will never know because the department is refusing to release the value of the cancelled work.

Contacted today by Bond Papers, a spokesperson for the department refused to release what was described as “commercially sensitive” information.


Can a bowtie be far behind?

Newly minted tourism minister Terry French seems to have a thing for Joe Smallwood.

Consider this bit of his answer to a question about the province’s tourism budget:

Do you know how many awards we have won in marketing in this Province? We have not won one, we have not won ten, and we have not won twenty - fifty-one awards.

French couldn’t have nailed the Smallwood trademark any better if he’d practiced it for hours with Kevin Noble.

There is no truth to the rumour that French was spotted recently in the mall looking for bowties.

But he might have asked Santa for one.


Electro-Jihad: the national view

From CBC’s The National and the panel review of 2009, comes Chantal Hebert’s assessment of the most under-reported story being the Hydro-Quebec/NB Power deal. 

You’ll find it about half way through that vid.  A specific clip should turn up shortly and that link will go up instead, but for now you have to scan through the full vid of The National. [Update:  and here it is.]

The thing is splitting the Atlantic provinces, according to Hebert.  It raises questions about national policy in several different ways. Andrew Coyne and Rex Murphy quickly chimed in to add to the assessment.  All noted the absence of any federal party leadership on the issue since it has implications for national economic policy and the free flow of goods and services across the country. 

Chantal Hebert hit a particularly sore point that remains under-reported within the under-reported story, namely the split within caucuses over the issue.  The Liberals especially have a problem with Quebec and New Brunswick members of parliament going one way and the Newfoundland crew taking “their orders from you-know-who” in Hebert’s words.

How true that is, and if the panel had noticed Michael Ignatieff ’s comments when he was in St. John’s a couple of weeks ago, they’d have seen a much bigger problem facing Ig and the federal Liberal caucus down the road a ways.

Meanwhile, in another corner, you-know-who is leading his provincial Conservative troops back to their ideological home in the Conservative party after a brief sojourn in the petulant box.

Wonder what that means for some of the crowd in the Liberal caucus who’ve been taking their orders  - as Chantal put it – from “you-know-who?”


Rorke’s other Drift

The present advocate reviewed the case again - and I cannot speak for the advocate, only what was given to me - he felt that the review was unnecessary but would continue based on the actions of the previous advocate.
That’s child, youth and family services minister Joan Burke during Question Period in the House of Assembly on December 10

She’s referring to retired judge John Rorke and a review of a tragic death in Labrador initiated by his predecessor. 

Now all these high-fallutin’ legal notions might be more than a humble e-scribbler can grasp but surely it is just dead wrong for someone to state an opinion on an investigation before it is concluded.

Wouldn’t this be like the judge saying  - before any evidence had been presented - that he could see no reason in wasting everyone’s time on this and entering a verdict right off the bat?

And it would be even worse  - wouldn’t it? - if, having made such a preliminary judgment, he then communicated that observation to someone outside his office.

Now if Judge Rorke, as he used to be, has reviewed the material collected to date and has reached a conclusion, he certainly has the power to do so and cease any further inquiry into the matter.

It’s spelled out clearly in the law:
18. The advocate, in his or her discretion, may refuse to review or investigate or may cease to review or investigate a complaint where…e) in his or her opinion the circumstances of the complaint do not require investigation; …”.
How very peculiar that the former judge would persist in a review which he had already decided was unnecessary and that he could stop on his own authority.

How very peculiar indeed.


Fortis/ENEL Expropriation, one year later

Outside the legislature on Wednesday, Premier Danny Williams had this to say about the legal and financial problems that are still hanging around after last December’s seizure of assets by the government under a hastily compiled expropriation bill.

The expropriation will come with a purchase price, but Williams said he now plans to deduct the cost of severance and environmental cleanup from the final amount.

"So, if the possible environmental exposure and, or, the severance were X amount, and the amount that the assets were valued at were substantially less, well, then obviously there would be no payments of cash from the government," Williams said.

One of the great unreported facts of this expropriation – unreported by the conventional media, that is – is that the expropriation didn’t just affect AbitibiBowater.


Included in the seizure were assets of Newfoundland and Labrador-based Fortis Inc and an Italian company called ENEL. 

The former was involved in a hydro project that supplied power to the former Abitibi mill at Grand Falls-Windsor and sold the rest to the provincial energy corporation.

The latter was involved in a hydro project at Star Lake that had absolutely nothing to do with supplying anything to the mill.  The Star Lake generating plant was built in response to a call for proposals by the province’s energy corporation about a decade ago. The plant supplied power to the grid to reduce emissions from the diesel plant at Holyrood.

Now if you take the Premier’s comments at face value you get a truly amazing thing and one that is unlikely to be swallowed that easily by the companies involved.

If there are any environmental liabilities related to the Abitibi mill, it would be quite a stretch to suggest that ENEL and Fortis somehow have any responsibility for them given that their operations were not for running the mill.  ENEL has got a real case in this respect, one would suppose.

By the Premier’s construction a company like ENEL could undertake legitimate business activities based on a government contract entered into in good faith by all parties only to find itself, in less than a decade, not only without the assets it paid for but without any compensation whatsoever for the government seizure.

And the excuse for stiffing them is that they somehow gained a liability for something they had no responsibility for in the first place.

This is one of those moments where you’d wonder if the Premier would be quite so calm about it all if someone were trying to pull the same stunt on him.

Meanwhile, one wonders if the rapprochement between the provincial Conservatives and their federal cousins might possibly have something to do with trying to get Ottawa to protect the Newfoundland and Labrador treasury from the fall-out of last year’s seizure.  The federal government has to deal with the international repercussions – like the NAFTA challenge Abitibi filed – but there doesn’t seem to be anything stopping the feds from recovering their costs once the international bits are settled.

Of course, all of this really makes a mockery of recent efforts by the provincial government to win sympathy for its case against Hydro-Quebec.

If the Americans really started to care about it all anyway, might those same New York financiers who supposedly listened sympathetically to the luncheon speech a couple of weeks ago feel quite so favourably disposed to the Premier’s cause if they got the full story on how Fortis and ENEL got screwed over by the Premier’s seizure?

This expropriation business is a long way from settled and the bills are a long way from being paid.  Something says some of the bills won’t be settled in cash, either. 

Payback will be a mother.